Stocks Struggle To Mixed Close As Investors Fret
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
Wall Street staggered to a narrowly mixed finish yesterday as investors coming off last week’s sell-off fretted over an uncertain economy and digested strong first-quarter earnings and a pair of merger announcements.
Stocks struggled to find a bottom after three straight triple-digit drops in the Dow Jones industrials, but sharply fluctuating prices and the lack of a solid recovery rally spoke to investors’ continued nervousness about the possibility of inflation in the middle of a projected slowdown in economic growth.
“After you see a decline of the magnitude we saw Friday, you’d expect some degree of recovery, but we’re not seeing much, and that’s very uninspiring,” said the chairman and chief investment officer of Johnson Illington Advisors, Hugh Johnson. “This makes me believe that we may have further to go before we find a bottom here.”
The Dow fell 16.26, or 0.16%, to 10,071.25 after losing 420 points the past three sessions.
Broader stock indicators edged higher. The Standard & Poor’s 500 index was up 3.36, or 0.29%, at 1,145.98, and the Nasdaq composite index gained 4.77, or 0.25%, to 1,912.92.
Oil prices moved in and out of negative territory, adding to Wall Street’s uncertainty. A barrel of light crude closed at $50.37, down 12 cents, on the New York Mercantile Exchange. Bonds were lower after last week’s rally, with the yield on the 10-year Treasury note rising to 4.27% from 4.24% late Friday. The dollar fell against most major currencies, while gold prices rose.
The volatility and lighter volume in stocks were due in part to a pair of economic reports coming later in the week – today’s Producer Price Index, which measures wholesale price increases, and its retail counterpart, the Consumer Price Index, on Wednesday. Many analysts have projected slower economic growth for the second half of the year – and if the reports point to a rise in prices, slower growth could turn into no growth.
“These are very important reports, and it’s not surprising that investors would pay considerable attention to them,” said an equities strategist at J.P. Morgan Private Bank, Jack Caffrey. “This will forecast the state of the economy and what the Federal Reserve might do with interest rates, and it’s not surprising investors would be skittish taking large positions in front of that.”
